Unsustainable union contract benefits included 100 percent insurance coverage, up to 95 paid sick days and more

The virtually bankrupt Muskegon
Heights and Highland
Park school districts are in the news for extreme financial mismanagement, which has occurred in good part because of provisions in their most recent collective bargaining agreements for teachers.

Typically, labor costs dictated by teacher union contracts consume
about 70 percent of school district revenue, so what they require can be a key determinant of fiscal viability. Given what’s in these, it’s not surprising that Muskegon Heights and Highland Park got in trouble. However, similar
provisions can be found in most school union contracts around the state.

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Using the district’s payroll system to
automatically deduct and deliver union dues from employee paychecks;

Carrying the union president as something not far from a
part-time “ghost employee” who gets paid to conduct union business for half the
day;

Handing over to the union all the details of
district’s finances; and

Agreeing to fire any teacher who evades paying
union dues.

The contract then guarantees a “single salary schedule,”
which pays teachers in the same manner as industrial assembly line workers,
with no regard for individual performance or merit.

This pay schedule mandated that most teachers got annual
raises of 5 percent to 9 percent, simply for keeping their jobs for another year. More
such rewards were guaranteed by permanent pay bumps when an employee reached 15,
20 and 25 years on the payroll.

The district also paid out extra money for various functions
such as “teacher coordinator,” “curriculum council member,” “psychological
diagnostician” and high school “senior sponsor.”

Highland Park also paid 100 percentof the premiums for medical, dental, vision, life and liability
insurance for teachers. In certain circumstances, the district even provided
free coverage when a teacher took extended leave.

Every year the district allotted five paid days off for
“personal business,” five days for family illness and 15 days for personal
illness. An unlimited number of these could be saved up, and the district
would pay teachers about $100 a piece for them upon retirement.

The district also granted each teacher between 40 and 75
long-term paid sick leave days (depending on seniority). These could be used
for any illness that lasted more than 10 days.

The last Muskegon Heights teacher
contract was a five-year deal signed in 2006, in the midst of Michigan’s
“single-state recession.” In addition to automatic 4 percent to 5 percent pay bumps built
into the single salary schedule, the contract granted annual, across-the-board
pay increases ranging from 0.5 percent to 1.75 percent. To illustrate, a new
teacher hired in 2006 would cost the district 25 percent more in salary by 2011
(and 36 percent more if he or she chose to get a master’s degree).

Muskegon Heights also gave “longevity” pay hikes: After 12
years, teachers got a permanent 1 percent pay hike; after 14 years, 2 percent,
and after 20 years, a 4 percent pay boost. The school board also signed on to
giving teachers extra premiums ranging from $1,070 to $3,200 for duties like
being the cheerleading adviser, “faculty manager,” school dance adviser or
director of intramural sports.

Like Highland Park, Muskegon Heights also paid the full
health insurance premiums with no contributionrequired from teachers. In 2011, this insurance plan — provided by
a lucrative affiliate of the teachers union (MESSA) — cost the district more
than $21,000 per teacher for an annual family plan. That’s more
than twice the amount private sector Michigan employers pay for family
insurance plans on average, according to the Kaiser Family Foundation. The
district also paid teachers choosing not to enroll in this health plan a
stipend.

The contract provided 10 paid sick leave days, five paid
leave days for funeral attendance, and two personal leave days per year. Up to
200 unused sick days could be accumulated and a portion of these cashed in at
retirement.

The district also granted one-year unpaid leave to travel
and two years for “professional study,” guaranteeing a job upon return from
leave. The contract did not specify where the funds would come from to pay for
the required temporary replacements.

In should be noted that over the course of the last decade,
the Michigan Legislature also contributed to rising labor costs by imposing a mostly unreformed and
unsustainable “defined benefit” pension system that now consumes a full 25
percent of school payrolls. In addition to the built-in rising costs of these
teacher contracts, the failure of the Legislature to enact needed pension reform
is contributing to collapses like the ones we see in Highland Park and Muskegon
Heights.